Private equity is still in the running to buy IKB Deutsche Industriebank from German state-owned KfW Bankengruppe, although US buyout house Texas Pacific Group appears to have dropped out of the race.
Ripplewood, a US private equity firm, is believed to have reached the third and final round of the auction at the end of May. KfW said that it had received “several interesting and serious offers” to buy its stake for a reported €800m but did not identify the bidders.
One report named Ripplewood, US peer Lone Star and Swedish bank Skandinaviska Enskilda Banken as having made it through to the final round. Another report said that Apollo Management, an alternative asset manager, had submitted a bid.
JPMorgan is advising IKB, with KfW advised by Merrill Lynch. An additional 10.7% stake is also up for sale by non-profit organisation Stiftung Industrieforschung.
JC Flowers, the alternative asset manager headed by Christopher Flowers, which made a high-profile play for Northern Rock last year, pulled out of the running for IKB recently, as did German state-owned bank BayernLB. Swedish bank Skandinaviska Enskilda Banken was also believed to have made it through the previous round.
KfW, which currently owns a 45.5% stake in IKB, has agreed with the German government and other banks to grant IKB a total of €8.5bn in risk guarantees after sub-prime related investments caused severe damage. KfW has announced that CEO-designate Ulrich Schroeder, who currently heads up North Rhine-Westphalia’s development bank NRW, will be involved in the sale before officially taking over.